The percentage of fraudulent online attacks in the United States is swelling at an alarming rate. It is estimated that since October 2015, the rate increased by 11%, mirroring a value of US $ 10.7 billion in 2015 itself and targeting weak links like card not present (CNP) transactions. It is expected that the value of fraudulent transactions will shoot up to the US $ 25.6 billion by 2020. As such, banks are urging online merchants to adopt best practices and collaborate to develop appropriate security standards.
The reason behind the rise in fraudulent transactions
October 2015 was marked by the Europay, MasterCard, and Visa (EMV) liability shift whereby chip technology with one-time codes are used for payments to be approved. This innovative system makes it almost impossible to use counterfeit cards. Fraudsters were automatically inclined to focus on weak links like CNP transactions. Such payments, where the cardholder does not physically present the card for visual examination, proved to be extremely vulnerable and risky. Certain CNP channels furthermore have shortcomings in terms of authentication protocols.
Mobile commerce security measures
The risks associated with mobile commerce are vast. Contrary to what many people believe, the risks with mobile commerce are different from those in e-commerce and should not be mixed up. For businesses using mobile commerce, it is crucial to devise mobile-specific tools to manage fraud. Businesses should equally consider retrieving data from these tools to authenticate the user’s identity, and thus, be notified of time in case of fraudulent customers.
A good mixture of security measures
It has been proven that the most effective security system is based on a good mixture of multilayered and multifactor measures. The system should be adapted to the CNP fraud strategy of the company to be fruitful.
Shifting to chip cards
One of the safest measures to prevent the use of counterfeit cards is to adopt chip cards and quit the use of magnetic stripe cards. Even if the US payment system has shifted to chip cards, many customers are still using the magnetic stripe cards which are highly susceptible to be counterfeited.
In the fight against online fraudulent transactions, collaboration is a keyword. It has been proven that the sharing of information and expertise as well as inclusive collaboration have caused positive impacts on businesses. Cross-industry sharing of valuable data may encourage higher efficiency in curbing fraud. Best practices designed from previous experiences should equally be shared with others.
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